Spain Is Told Its Help in Iraq Will Pay Off

By DALE FUCHS

Published: November 6, 2003

MADRID, Nov. 5—
Spain's political support of the United States in the war in Iraq will have an economic payoff, the president of the United States Chamber of Commerce, Thomas J. Donohue, told Spanish business leaders here on Wednesday.

American multinationals are interested in ''partnerships and collaborations'' with Spanish companies in Latin America, where Spain is a leading investor, and the chamber ''has the intention of helping Spanish firms increase investment'' in the United States, Mr. Donohue said at a news conference. He also reassured Spanish engineering, infrastructure and construction companies that they ''will be part of the rebuilding process'' in Iraq.

Mr. Donohue met privately Wednesday with Prime Minister José María Aznar; the Popular Party candidate for the March national elections, Mariano Rajoy; and King Juan Carlos. Mr. Donohue then spoke with representatives of Spain's largest corporations, like Telefónica, Gas Natural, Repsol and El Corte Inglés, as well American multinationals based in Spain, including I.B.M., J.P. Morgan and Ford. Another high-level bilateral meeting is planned in January, Mr. Donohue said, when Mr. Aznar will travel to the United States to meet with business leaders.

''Spain is becoming a major player in the global investment scene,'' he told the assembled business leaders, praising the country's economic growth, which stands in contrast to its neighbors' sluggish performances. ''That's why more than 500 U.S. firms have come to Spain, and I predict more are on the way,'' he said. ''And with Spain becoming a major player in the global investment scene especially in Latin America, Spanish and American companies will find even more opportunities to partner and to grow together. ''

Spanish businessmen received his words with enthusiasm.

''We always considered the United States to be a closed market, but the political climate is right to look for American partners,'' said Manuel Contreras, chief executive of the AZVI construction company, which operates in Chile.

Manuel Egea Llaneza, chief executive of the Spanish Consortium of Technical and Industrial Suppliers, a trade group, said he was ''studying opportunities'' to do business in Argentina with North American companies that have ''shared interests.'' ''We're not looking at mergers, but possible joint ventures or technological cooperation agreements,'' he said.

Spanish leaders are concerned that, with the European Union expanding in the Continent, manufacturers will flee to Eastern Europe where labor is cheaper. They are also aware that their midsize companies need to grow to compete with German, French and other European multinationals.

So the Spanish Institute for Foreign Trade is trying to seize the moment of political cooperation between the United States and Spain to promote economic cooperation as well. Project USA is the code name. The goal is to attract high skills and high-paying companies from the United States, like research and development complexes, and then use the United States as a base for expansion.

Mr. Aznar's trip to Florida, California and Texas in September was part of the larger strategy, and it has already shown some results. The Spanish company Indra Sistemas won a 2.8 billion euro ($3.2 billion) contract from the United States government to make aviation simulators; a Spanish biotechnology company has set up shop in California; and Spanish infrastructure companies will receive special consideration for a $15 billion highway and telecommunications project in Texas, said Jaime Malet, president of the United States Chamber of Commerce in Spain.

The United States has promised to back Spain's candidacy for a 4.5 billion euro nuclear fusion project, known as the International Tokamak Experimental Reactor, which would create 1,300 jobs for scientists alone, Mr. Malet said. Spain will be competing with France for the European Union's endorsement to get the project. But if the European Union chooses France, Mr. Malet said, then the United States would throw its support to Japan, leaving Europe out of the project.

Photo: Thomas J. Donohue, president of the U.S. Chamber of Commerce (Photo by Bloomberg News)(pg. W7)